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TMI Blog2024 (10) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the IGST paid by the appellant since, the same is availed as ITC under GST there is no malafide on the part of the appellant. Hence, penalty corresponding to the duty paid by the appellant which is not in contest will also not sustain on the ground of Revenue neutrality. In the facts of the present case the appellant‟s bills of entry were assessed and the same were verified by the custom authority and clearance of goods was allowed. The issue raised in the present show cause notice was very much existing at the time of assessment of bill of entry. The appellant have bonafidely claimed the exemption Notification No.18/2015 as amended. Therefore, nothing prevented the department to raise the objection at the time of assessment of bills of entry and clearance of goods. Moreover, the issue involved interpretation of exemption notification on advance authorization - the suppression of fact cannot be attributed to the appellant. Accordingly, the extended period for demand is prima facie not invokable in the facts of the present case. Therefore, the appellant has made out a strong prima facie case on time bar. Though entire case has been decided on factual matrix as discusse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports were made involving IGST amount of Rs. 9,77,71,269/- against the 5 advance authorization. Out of these 122 Bills of Entry, 114 Bills of Entry pertain to ICD Khodiyar, Ahmedabad involving IGST of Rs. 8,84,29,279/-, while 05 Bills of Entry pertain to Sanand Port involving IGST of Rs. 53,17,805/-, 01 Bill of Entry pertains to Mundra Ports involving IGST of Rs. 8,08,975/- and 02 Bills of Entry pertain to Nhava Sheva Port involving IGST amounting to Rs. 32,15,209/-. In conclusion, it appears that Appellant have contravened the provisions of Section 17 and 46 of the Customs Act and also provisions of Customs Notification No. 18/2015-Cus dtd. 01.04.2015, as amended by the Customs Notification No. 79/2017-Cus. dtd. 13.10.2017 read with provisions of Para 4.03, 4.13 4.14 of the Foreign Trade Policy (2015-20), as amended by the DGFT Notification No. 33/2015-20 dtd. 13.10.2017 issued in terms of the provisions of para 4.13 of the Foreign Trade Policy (2015-20). 1.2 Accordingly a show cause notice dtd. 19.10.2022 was issued by the Commissioner of Customs, Ahmedabad to the Appellant proposing recovery of Customs duty in the form of IGST forgone in course of imports of the goods through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import condition. However, it simultaneously inserted Condition No. (vi)(a) and (vi)(b) vide Notification No. 01/2019-Cus. dtd. 10.01.2019 in AA exemption notification. Condition (vi)(a) provided non-exempted export inputs could be used only in supply of taxable goods and not exempted goods, if the exporter had availed ITC of inputs used in export items. Further, the exporter is required to submit a Bond to the Deputy Commissioner/ Assistant Commissioner at the port of clearances that the said inputs would be used by him or his supporting manufacturer only in supply of taxable goods and not nil rated or exempted goods. Further, the exporter is also required to submit a Certificate from CA that the imported inputs have been used in taxable supplies only. Further it is also provided that if the facility of ITC is not availed or if IGST/cess is paid at the time of import, then such condition would not apply. The removal of pre-import condition and the insertion of Bond/Certificate condition to use post-export inputs only in taxable supplies has to be seen as an integrated step, both intended to achieve same objective. The stipulation imposed in January 2019 is in fact a re- introducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on from payment of IGST on imports against AAs would be subject to pre-import condition‟. Further para 4.13 of the FTP provides for pre-import condition in certain cases. Further the government removed the pre-import condition for granting exemption form IGST and Compensation Cess for materials imported against the AAs vide Notification No. 01/2019- Cus dtd. 10.01.2019. However, the Hon ble Supreme Court in Union of India Vs. Cosmo Films Ltd. -2023(5) TMI 42-SUPREME COURT has reversed the judgment of Hon ble Gujarat High Court and has held pre-import condition to be valid. The Apex court observed that the concept of pre-import condition‟ was not alien to the FTP. Supreme Court in its order has directed the board to issue a circular on re-credit or refund of IGST paid now. Subsequently, as directed by Apex court, CBIC issued Circular No.16/2023-Cus, dtd. 07.06.2023, further DGFT issued Trade Notice No. 07/2023-24 dtd. 08.06.2023. The circular mentioned that all the imports made under Advance Authorization Scheme on or after 13.10.2017 upto and including 09.01.2019 which could not meet the pre-import condition may be regularized by making payment as prescribed in the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. 2.10 Without prejudice, he also submits that if the appellant would have paid the IGST at the time of exports, they would have been entitled to avail the refund of the same under Rule 96(10) of CGST Rules. Therefore, to that extent, the situation is revenue neutral. He also placed reliance on the following judgments. (i) Steel Authority of India Vs. Collector of Central Excise -1997 (90)ELT 287 (ii) TVL Kasi and Sethu Vs. The deputy Commissioner Tax officer 2003(131)STC 73 (iii) Income tax officer Vs. BachuLal Kapoor -1966(60)ITR 74 (iv) CCE Vs. Special Steel Ltd. -2015(329)ELT 449 (T) 2.11 He further submits that the Section 28 (1) of Customs Act provides a limitation period of two years from the relevant date for issuance of SCN. In the present case the date on which the goods cleared from the port of import shall be taken as the relevant date. The latest BOE covered by SCN dtd. 14.12.2022 was cleared on 09.01.2018. Therefore, as per the provisions of Section 28(1) of the Customs Act, SCN could have been issued by 08.01.2020 i.e within the period of two years from the relevant date. However, the present SCN was issued on 14.10.2022 which was after the lapse of limitation peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no levy of such of amount in terms of Section 3(12) of Customs Tariff Act. He also submits that as regard the confiscation of goods and redemption fine, therefore, the same is not maintainable for the reason that goods were not available for confiscation. Since, the demand itself is not sustainable on ground of revenue neutrality and time bar, the penalty was also not imposable. 3. On other hand Shri P Ganesan, Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submission made by both the sides and perused the records. We find the issue involved in the present matter is whether appellant is liable to pay Duty (IGST), interest, redemption fines and penalty confirmed by the impugned order in connection with alleged violation of Pre-import Condition in the imports made against the advance authorization scheme during the period October 2017 to November 2018, read with Notification No. 18/2015- Cus dated 01.04.2015 as amended by the Notification No.79/2017-cus dated 13.10.2017. We find that the demand of IGST was raised on the ground that the appellant have not complied with the pre-import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xii) provides that the exemption from IGST shall be subject to the pre-import condition, making it evident that those materials or inputs which satisfy the pre- import condition will be eligible for exemption from IGST. It is clear from the wording of Notification No. 18/2015- Cus. that the exemption granted is qua the goods and not qua the authorization. Thus, it is clear that the true meaning of the pre-import would be the utilization of inputs for exports. It is submitted that in the present case, inputs were utilized to manufacture the exported goods, in such cases the pre-import condition is satisfied and the exemption from payment of IGST was rightly claimed by the Appellant. Further there is no allegation that imported inputs are sold as such in the domestic market. 4.4 We find that Appellant is eligible for the clubbing of all the Advance Authorization in terms of para 4.38 of the FTP. Once all the Concerned Advance Authorizations are clubbed together then all the imports have to be considered as part of one Advance Authorization. It is submitted that the inputs imported by the Appellant against all the 8 AAs in the dispute period are used in manufacturing the finished pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplied with the pre-import condition in above A/A. 4.8 In case of 2ndAdvance Authorization No. 0810141977 dated 12-03- 2018, department has wrongly taken 1st Bill of Entry No. 5951050 dated 12- 04-2018, instead of taking first Bill of Entry No. 5548344 dated 12-03-2018. In fact, in this case, first import was made vide Bill of Entry No. 5548344 dated 12-03-2018, which was well prior to the date of first export of goods manufactured out of duty free materials, made vide Shipping Bill No. 3577926 dated 19-03-2018. In the SCN, the 1st Shipping Bill was also wrongly taken, as SB No. 3093090 dated 24-02-2018, instead of taking 1st Shipping Bill No.3577926 dated 19-03-2017 under which materials imported duty free were used. Under this AA, first two consignments exported vide Shipping Bill Nos. 9459310 dated 24-10-2017 9557850 dated 28-10-2017 were in fact manufactured out of IGST paid imported raw materials. Thus, the duty-free raw materials imported under said AA were used in the manufacture of goods exported under said AA. DGFT has already issued EODC for subject AA. Thus, the appellant has complied with the pre-import condition in above A/A also. 4.9 In case of 3rdAdvance Authorizatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll of entry was re-assessed and appellant have paid the IGST for which they are not contesting on the ground that they are eligible for ITC under GST. In view of the above on the factual aspects of the case the demand of IGST along with the interest, fine and penalties are not sustainable. As regard the penalty corresponding to the IGST paid by the appellant since, the same is availed as ITC under GST there is no malafide on the part of the appellant. Hence, penalty corresponding to the duty paid by the appellant which is not in contest will also not sustain on the ground of Revenue neutrality. 4.13 We also find that the appellant has vehemently argued that the entire demand is hit by limitation for the reason that the demand for the period October-2017 to November-2018 was raised by show cause notice issued on 19.10.2022. In the facts of the present case the appellant‟s bills of entry were assessed and the same were verified by the custom authority and clearance of goods was allowed. The issue raised in the present show cause notice was very much existing at the time of assessment of bill of entry. The appellant have bonafidely claimed the exemption Notification No.18/2015 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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